LINE OF CREDIT NOTE


$1,500,000.00                                              Boston, Massachusetts
                                                                  April 14, 1997


FOR VALUE RECEIVED, the undersigned KURZWEIL APPLIED INTELLIGENCE, INC. a
Delaware corporation ("Maker"), hereby promises to pay to the order of LERNOUT &
HAUSPIE SPEECH PRODUCTS USA, INC., a Delaware corporation, at its place of
business at 20 Burlington Mall Road, Burlington, Massachusetts 01803 ("Lender"),
the sum of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00), or so much
as may have been advanced to Maker as provided in that certain Loan Agreement
(the "Loan Agreement") dated as of the date hereof between Maker and Lender,
together with interest on the unpaid principal amount from time to time
outstanding prior to demand at a fixed rate per annum equal to the Prime Rate in
effect as of the date hereof.

Prior to the occurrence of an Event of Default, as defined in the Loan
Agreement, interest shall accrue but shall not be payable currently. All
outstanding principal and interest shall be due and payable in full on October
31, 1997.

After the occurrence and during the continuance of an Event of Default, (a)
principal outstanding hereunder shall bear interest at a fixed rate equal to the
sum of the Prime Rate in effect as of the date hereof plus three percent (3%)
per annum (the "Default Rate of Interest"), and (b) the Lender shall be entitled
to accelerate all outstanding principal and interest due hereunder and demand
immediate payment in full of the same.

Interest and fees shall be calculated on the basis of a 360-day year times the
actual number of days elapsed. "Prime Rate," as used herein, shall mean for any
day the highest "prime rate" published in The Wall Street Journal under the
heading "Money Rates" on such day (or on the next day on which The Wall Street
Journal is published). In no event shall interest payable hereunder exceed the
highest rate permitted by applicable law. To the extent any interest received by
Lender exceeds the maximum amount permitted, such payment shall be credited to
principal, and any excess remaining after full payment of principal shall be
refunded to Maker. This Note evidences borrowings under the Loan Agreement and
is secured by and entitled to the benefits of the provisions of the Loan
Agreement and any other instruments or documents executed in connection
therewith. The principal of this Note is subject to prepayment in full or in
part at any time without premium or penalty.

Maker and all guarantors and endorsers hereby waive presentment, demand, notice,
protest, and all other demands and notices in connection with the delivery,
acceptance, performance and enforcement of this Note, and assent to extensions
of the time of payment or forbearance or other indulgence without notice. No
delay or omission of Lender in exercising any right or remedy hereunder shall
constitute a waiver of any such right or remedy. Acceptance by Lender of any





payment after demand shall not be deemed a waiver of such demand. A waiver on
one occasion shall not operate as a bar to or waiver of any such right or remedy
on any future occasion.

Executed as an instrument under seal as of the date first above written.


WITNESS:                                    KURZWEIL APPLIED INTELLIGENCE, INC.

/s/                                         By:  /s/ Thomas E. Brew Jr.
- -----------------------------                   --------------------------------
                                                 Name:  Thomas E. Brew Jr.
                                                 Title: President & CEO



                                      -2-